Retirement expert says financial literacy more important than ever

PEORIA — John Blossom is a retirement expert but, at 73, he’s not ready to retire.

He’s too busy running the Illinois office of the company he founded that now boasts more than $3 billion in assets from retirement plans for companies throughout the state and nationwide.

As CEO and president of the Alliance Benefit Group of Illinois, 456 Fulton St., Blossom has seen retirement planning become a growth industry since he got into the business in 1969.

Blossom headed up the entire Alliance network made up of 15 offices nationwide until last year when Don Mackanos was named CEO.

That allows Blossom, who remains on the Alliance board of governors, to concentrate on taking care of business in Peoria.

“It’s enabled me to focus more clearly on our organization,” he said of a Downtown office of 76 people.

With many businesses now foregoing traditional pensions in favor of 401(k) plans for employees, the need for sound financial planning has become more important than ever, he said.

With that changeover — started in the late 1980s and early 1990s — have come misconceptions, he said. “The 401(k) movement was primarily stock market-driven. The feeling was that everyone would make a fortune,” said Blossom.

Then came the dot-com sell-off of 2000 and economic upheaval of 2008.

In order to counter such vagaries in the market, one needs education — specially, financial literacy, he said.

To illustrate, Blossom demonstrated on a tablet in his Downtown Peoria office, festooned with Green Bay Packer memorabilia (a poster of famed Packer coach Vince Lombardi hangs on the wall over his desk), to call up a Web-delivered tutorial designed to help an employee of an Alliance-served company with a specific financial topic.

“The whole industry has been enabled by technology. Access to information is enhanced with the Internet,” he said.

Pointing to recent research from Aon Hewitt, a Chicago-based consulting firm, Blossom said that plan sponsors now embrace a more holistic perspective on retirement programs, focusing on financial wellness and measuring projected retirement income, instead of simply spotlighting participation and savings rates.

“We’re putting more into interactive video training that’s available to people when they want it,” said Blossom, aware that while individuals, who have more personal responsibility to save for retirement, often lack involvement in their defined contribution plan.

“The objective is to get people retirement ready. It’s all about financial fitness,” he said.

As to how much people need to save for retirement “depends on who’s telling the story. By and large, it’s been the big financial institutions who’ve been doing the talking,” said Blossom, pointing to another retirement study that points out that Social Security would replace 41 percent of the medium earner’s preretirement earnings.

“Most of the recent assessments suggesting that the majority of American workers are insufficiently prepared for retirement are based on models that fail to reflect patterns of income, consumption and savings that vary over workers’ lives,” stated the authors.

“What makes a retirement plan successful is the support an employee gets from an employer,” said Blossom. That support means helping people understand what financial choices might be best for them, based on their own unique set of circumstances, he said.

Steve Tarter is Journal Star business editor. Tarter’s phone number is 686-3260, and his email address is starter@pjstar.com. Follow his blog, Minding Business, on pjstar.com and follow him on Twitter @SteveTarter